Coalition year one: Spending cuts

The coalition's first anniversary sees Britain in an unhappier place economically and socially than it was a year ago.

By Len McCluskey

The UK economy has been used as an experiment of almost Neo-Con proportions designed to cut the government's deficit at breakneck speed to the exclusion of every other economic consideration, whether it is jobs, public services, living standards, the rate of inflation, boosting manufacturing industry, and curbing soaring food and energy bills.

The question to ask is who benefits from this one-trick policy? It is not the consumer with less money to spend; the high street retailer not getting the footfall through the shopping malls; public services which are facing the worst cuts in a generation; the 16- to 24-year-olds seeking employment and training; future students being hit by annual £9,000 tuition fees; those facing having to work after 65 to have any sort of decent retirement income; those relying on a fading housing market; or those seeking treatment who see the NHS being privatised before their very eyes.

In other words, the coalition's economic, fiscal and social policies are hitting the vast majority of the population adversely.

So who are the winners? Very few, in fact - a self-serving City elite, which created the economic mess in the first place; Rupert Murdoch with the take-over of BSkyB a top priority from a compliant government; private healthcare companies set to gobble up lucrative NHS contracts; and the very rich benefiting from tax breaks and clever accounting - ie the minority.

Unite, as the largest union in the country representing 1.5 million members, believes that, contrary to government thinking, there is a viable alternative, supported by many economists, to the hatchet-like cuts that are starting to devastate public services and the communities they serve.

It is quite clear that the coalition has got itself into a mindset that views "cuts, cuts, and more cuts" as the main lever to achieve Britain's economic stability. Unite does not deny that the deficit has to be tackled, but cuts do nothing other than shrink the economy - a self-inflicted wound by chancellor George Osborne. We need, as a nation, to invest in growth first and then the deficit can be tackled.

And what about fairer taxation, tax reform, and cracking down hard on tax avoidance; or a coherent plan for economic expansion and job creation, all which have been sidelined? We need a sustained house building programme to assist the millions on waiting lists or are currently living in sub-standard accommodation. Such a programme, in turn, would boost all those industries involved in house building from architects to bricklayers, as well as retailers proving furnishing and 'white goods.

The £81 billion worth of spending cuts announced in last autumn's comprehensive spending review coupled with the rise in VAT, as well as rising household bills, has taken a massive amount of demand out of the economy. Many local economies, especially those relying on a large public sector, are being be crippled, as libraries close, subsidies to bus services slashed, and care for the elderly and the young curtailed.

And this one-note strategy is not convincing everyone. The recent influential National Institute for Economic and Social Research warned that Osborne would miss his deficit reduction targets. Why? Because there is no growth in the economy. The UK is becoming a stagnation nation, all because of Osborne's political pig-headedness.

Ministers are putting great store in the hope that the private sector will lead the economic revival, riding to the rescue of the half a million or so public sector workers dumped on the dole. So far, the private sector is exhibiting little sign of taking up its role as powerhouse - the recent Focus administration saw another 4,000 jobs put at risk.

Vince Cable is fast becoming the 'do nothing' business minister. So when 2,500 skilled research jobs were lost at Pfizer in Sandwich earlier this year, his lips stayed sealed. The Regional Development Agencies were scrapped, denying £8 to our regions for every £1 they cost, to the delight of our EU competitors. And where is the Cadbury Law to stop predatory foreign takeovers of reputable and profitable British companies?

So the report card on this first anniversary of the coalition shows a D minus. The pupil seems not to be listening either - and that is a serious problem for us all.

Len McCluskey is general secretary of the Unite union

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